HIGH street giant HMV is launching an online music shop. It is spending £10million in a link with America's Microsoft to launch the download service next year.

The service will work with Microsoft's Windows Media Audio. But it will not be compatible with Apple iPods. The online music battle is hotting up. Tesco last month announced a service competing with MSN Music and iTunes. HMV is yet to decide how much downloads will cost. Tesco and iTunes charge 79p a track.